MIC: General Aviation Business Travel Down
Submitted by
CalculatedRisk on Thu, 08/07/2008 - 8:10am (25 comments)
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Where do you get this stuff CR? Remarkable.
Hey!! MIC is the group buying my local electricity provider. Assuming they are the same as or related to Macquarie Infrastructure Partners (MIP) Lots of people in my area rather angry about it, but big fish eat the little fish....
MarketWatch.com
volume down 4%, but money spent on fuel was?
I know I'm keeping my jets in the hangar more than I used to. BTW, I've always self-parked. Valet is for lazy people.
For some businessmen, especially traveling entrepreneurs and consultants in high-dollar businesses, GA makes total sense. Nothing beats the flexibility.
But I don't doubt that some businesses with their own planes -- and even those who fly commercial -- are increasingly discovering the joy of teleconferencing.
I was talking with Muffy the other day and she actually told me that she told her personnal shopbitch to wait for the sales!
I was speechless.
Sounds like Muffy is having problems. Muffy isn't good with problems.
"They also commented that private plane owners were shifting to more self park and using valet parking less."
Now thats some stuff you can't make up! ! !
.............
Seattle has finally cracked. This was the last major market to hold out..now down 7.5% YOY.
Seattle Bubble — News & discussion about real estate & the housing bubble in the Seattle area.
As I recall, mp and Conjure Bag have at least one plane. I'm thinking their personal experience would confirm this story. But I can't picture CB parking his own plane.
Albany NY is just one small airport but there numbers also show a decline in travel. However, they claim it is the leisure travel that is driving the decline.
The Airport Authority reported $18.9 million in revenues from January through June, 2.6 percent less than anticipated in the 2008 budget.
What we see happening is the business traveler is generally continuing fairly close to what would appear to be normal but the leisure is falling off and the general aviation traffic is falling off, Airport Authority Chief Financial Officer Dwight Hadley said. Were also experiencing a decrease in operations of commercial aircraft at this airport. We collect landing fees. Were operating at 70 commercial flights [per day] as of June, compared to 83 a year ago.
Airport Authority officials attribute some of the dropoff in flights to the loss of CommutAir in 2007, which had been using Albany as a hub for its Continental Connection operations. Hadley said some of the decline is the result of many airlines cutting back flights due to falling revenues and increased costs. He said Albany International Airport hopes regional flights will increase when Cape Air begins operations in the fall.
Authority spokesman Doug Myers said sales of rental car services out of the airport are up 1.6 percent year over year, translating to a 2 percent increase in revenues to the authority from rental car companies operating out of the airport.
That tells you business people are still flying, Myers said
I'm sure drug flights will be up soon.
All that Coke isn't coming Fed Ex.
Attention, Kmart shoppers: we'd like to direct your attention to the front of the store, we have a carry trade special.
Just try and short airlines right now. Can't get the stock. Period!
Parking your own plane is a small sacrifice compared to the horror of actually flying commercial. There are lines that just can't be crossed.
I don't know if this is the same thing, but the local "fly-in" at the county airport this year was a dud. Very small crowd this year -- less than 1/2 the planes normally expected.
Attention, Kmart shoppers: we'd like to direct your attention to the front of the store, we have a carry trade special.
LOL!
....................
John Lee-
Not surprising as the system piled into airline stocks the moment there was a pause in the parabolic climb in oil.
The same thing with Tech and whatever sector they decided to put the oil profits from. Airlines are run like non-profits and not real business'-with the exception of a very few.
US air gonna charge me for water??
Jet Blue charge me for a blanket??
Just put it in the price of the ticket...
I'd short them too if I could get a decent amount of shares. 50 or 100 just doesn't "fly".
Ciao
MS
I don't quite understand. Are they self-parking the Gulfstream, or is it the Veyron?
I'm flying a little less this year but we're still giving free rides to young eagles this weekend.
Yossarian- "But I can't picture CB parking his own plane."
Are you serious!? The flight doesn't end until the engines are OFF and the ride is TIED DOWN.
I would never, ever, allow one of those Freddie F*ckups near our ride. Ever!
By the way, it is true. General aviation is down, way down.
By the way, we also refuel ourselves. I don't trust the little ba8tards.
Authority spokesman Doug Myers said sales of rental car services out of the airport are up 1.6 percent year over year, translating to a 2 percent increase in revenues to the authority from rental car companies operating out of the airport.
That tells you business people are still flying, Myers said
Or that business people are driving instead of flying the last segment. Or that some people are renting cars for short hop instead of flying at all.
Just for perspective, aviation fuel -- predominantly 100 octane low-lead formulation -- has climbed to about $6-8 a gallon, depending on where you are in the country. It takes 40-80 gallons of it to fill the tanks. The engines burn between 8-12 gallons per hour, to go roughly between 115-150 MPH. Converting to terms drivers are familiar with, a typical 4-seat airplane gets maybe 15-18 MPG, worse than a sedan, but better than a large SUV. It's actually somewhat better than that because of straight-line path rather than following the roads. For regional travel (300-500 mile legs) it kicks the sh!t out of driving because of its speed - an overnight in the car is a day trip in the plane. It blows away commercial airlines because airport delays and short legs don't let a faster jets shine (which it would on 1200+ mile legs), no scheduling or hub-and spoke difficulties into regional airports, and opens up access to smaller municipal airports that don't get any commercial service whatsoever. Not to mention that you can't be late for a plane that can't leave without you (because you're flying it or paying for it), and you get to keep your damn shoes on.
Happy Aviating!
As an aircraft owner I've definitely curtailed my personal flying over the last couple of years, but until very recently (last 6 months) it's been because of my schedule, not my shock at the gas pumps. Just paid $6.25/g the other day. I asked the lady at the desk for advice as to what I should give as collateral for the mortgage to pay my fuel bill. She was not amused.
Datapoint: I heard through the grapevine that two local airports have experienced a roughly 40% YOY decline in the sales of AvGas (the 100 octane stuff we piston-powered aircraft owners burn). This can't go on for long before GA support infrastructure is no longer profitable (not that it ever has been to any great extent).
Good site about GA:
http://www.gaservingamerica.org/
Joanna, MIP is not the same as MIC.
While the flight volume has declined, several commenters point out that private flying is still a good deal for those who value speed and timeliness over price (although commercial flights have become more expensive, as we all know). MIC adjusts its fuel prices daily or weekly, depending upon airport, so doesn't face price risk in fuel.
MIC has self-park and valet park at many airports. The valet is higher-margin, but the self-park still has positive operating margins.
At an 11% dividend yield that management said is safe and even the bearish analysts project will grow in 2009, I think MIC is a steal.
Disclosure: Long MIC